Today, I would like to touch upon R&D spend. Research has shown that highly successful innovative businesses have a lower R&D spend to sales ratio compared to their competitors. For example, Microsoft has one of the highest R&D spend to sales ratio but poor innovative value-creation; however, Apple with one of the lowest R&D spend to sales ratio has continuously acquired market space with iPods, iPads and iPhones. Another great example is 3M’s post its, which were developed with resources that were already available at the company.

Spending less on R&D is not the only factor to consider when you are looking to create innovative products. You must also understand all your potential customers, their pain points and preferences. This information will help you identify and solve a problem that your competitors are not targeting.